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What is the meaning of Ex-Gratia Claim Payment?
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[QUOTE="Mataracy, post: 142894, member: 28733"] An insurance company is only obliged to pay where there is a legal obligation. If, for instance, the insurance contract is tainted with illegality or if the insured had committed breach of a fundamental condition or warranty, or if the loss falls within an exception under the policy, there will be no legal basis yo pay a claim. Repudiation of liability even when legally justified , may in certain cases, result in headship to the insured or a beneficiary if the policy. In practice, therefore, provided the insured has committed no fraud, insurance companies find it desirable to pay some claims on rx- gratia basis on compassionate ground and in order to protect the image of the company for fair dealing. Simply put, an ex-gratia payment is a payment made out of grace of favour without any liability on the insurer to mitigate possible hardship the insured might surfer if the insurer strictly repudiate liability on the terms if the policy. This will create good rapport between the insurer and the insured and can boost the image in part or in full. An ex- gratia payment should , however not be made frivolously but in exceptional circumstances since it may result to inequity in respect of the policyholders who contributed to the fund. This could even set an unfortunate precedence I citing many policyholders to make unnecessary demands from the insurer in cases where the claims are clearly not genuine. [/QUOTE]
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What is the meaning of Ex-Gratia Claim Payment?
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